The MF thing on resales confuses me

[Dean]

What would be the most common scenario for what the buyer assumes in MF if they buy the following resale? (yes, I know everything's negotiable, I just want to know if there is a starting point that is the "typical" expectation:

December UY, 150 points

no 2006 points
75 2007 points
150 2008 and beyond points

DH and I totally disagree on what's normal for a contract like this, so there is a footrub riding on you guys giving the right answer (the suspense is already killing me!).

Thanks!

The neutral point on fees for this contract would be no fees for 2007 and have the seller deduct approximately 5/12 of one year's fees from the purchase price for the fees due Jan 2008..

As to why brokers recommend otherwise, I'm not totally certain. I've always assumed it was related to the fixed weeks system where you pay the dues to get the week. Disney Vacation Club is somewhat unique in that the dues actually are on a calendar year basis. That means when you pay the dues in Jan, you're actually paying a portion of the preceding use year's dues and a portion of the upcoming one.

 

[lisareniff]

Having re-read what I wrote, I'm not sure if its because the realtors don't want to get involved in the calculation, don't want to explain it to their clients or are not familiar with it.

I purchased a resale contract 2 years ago. With the first resale company I talked to the agent actually argued with me the validity of not paying all of a years MF if you are getting that years points, even when I was using a Dec. UY as an example. His attitude totally suprised me. This was a company that does many many DVC resales and an agent that is often recommended so it clear that it was not unfamiliarity of the product, just his unbending opinion on how it should work.

I ended up purchasing with another resaler. I think this was something she did not do very oftern with MF, but she understood my reasoning and supported presenting my offer.

 

[Tamar]

So, if you were listing a contract like the one in my first post, would you go ahead and proactively note "no dues until 2008" or would you leave that for potential buyers to ask for, assuming they usually will?

 

[Dean]

So, if you were listing a contract like the one in my first post, would you go ahead and proactively note "no dues until 2008" or would you leave that for potential buyers to ask for, assuming they usually will?

I'd probably look for contract that was loaded in points rather than devoid of them. the problem you will have is that most resale agents are not cooperative in this area. Probably the best you can hope for is not to pay 2007 dues and adjust the price elsewhere possibly by having the seller pay part of the closing cost. You do have to look at the overall package and not focus in too much on one single area. You can easily in just any contract for number points available and dues by figuring about 10 dollars per point not available and then multiply by the number of months between now and the use year and dividing by 12.

 

[Tamar]

Dean, I'm asking as the seller, not the buyer. Thanks.

 

[Dean]

Dean, I'm asking as the seller, not the buyer. Thanks.

Get as much as you can but the principles still hold.

 

[Tamar]

Well, my DH apparently has addonitis worse than I thought, and just forwarded me papers from TSS for a resale he wants. It is for Dec points, and here's what the contract says:

BUYER IS RESPONSIBLE FOR THE ANNUAL DUES ON THE (FULL AMOUNT OF) POINTS FOR THE 2007 ALLOCATION WHICH MUST BE PAID IN FULL AT THE TIME OF CLOSING. SELLER TO BE REIMBURSED ANY PREPAID PORTION.

To me it sounds like TSS considers calendar year, not UY, to be the deciding factor.

 

[RobDoc]

All aspects of the resale are negotiable - including the maintenance fees. If that contract looks good to you when considering all apsects of the deal - then buy it at those terms. If you don't want to pay 12 months of fees for something not accessible to you until December 1, then make your offer with that in mind.

If you were buying that same contract from Disney, you would have all current (December, 2006) points intact and would get another allotment on December 1, 2007. In addition, DVC would prorate the annual fees from today - so you'd pay less than 5 months of those dues. If the resale will get you fewer initial points with higher annual fees, be sure to figure that into your computation of which is the better deal for you. There will also be closing costs with the resale and none thru DVC since you are already a member.

There is no right or wrong with these things. Just look at all costs and what you will end up with and use that information when making the offer.

Good luck with your decision.

 

[julie.uk]

I am just starting to buy a dvc resale contract OCT UY,

7 points to come from October 2007 all points from Oct 2008 through TSS,

Ive been told I should pay the MF on the 7 points from 2007 allocation still to

be issued and all MF in January 2008 for points to come in October 2008, is

this a good deal as I am beginning to think not based on what people are saying here. Seller agreed to pay half closing costs.

 

[RobDoc]

The contract you are considering has no current points (October, 2006 is still the Use Year) and most of the 2007 points have already been borrowed and used.

In this case, you would only be paying about $30-35 in dues, so I would not make that an issue - however, you will still be paying full fees for 2008 - even though you will not get any points until October, 2008. There is little difference in this case whether there you agree to pay the 2007 fees or not. For me personally, the issue is that I would be required to pay all of the 2008 fees even though there are only a few points available until late in the calendar year.

If the number of points is what you are looking for and you don't have travel plans where you'd need a better compliment of points ... AND ... you can purchase this at a good price which will still pass ROFR, it may still work for you.

There is no right or wrong, just be sure to use all of the information at your disposal to make a decision.

 

[Dean]

Well, my DH apparently has addonitis worse than I thought, and just forwarded me papers from TSS for a resale he wants. It is for Dec points, and here's what the contract says:

BUYER IS RESPONSIBLE FOR THE ANNUAL DUES ON THE (FULL AMOUNT OF) POINTS FOR THE 2007 ALLOCATION WHICH MUST BE PAID IN FULL AT THE TIME OF CLOSING. SELLER TO BE REIMBURSED ANY PREPAID PORTION.

To me it sounds like TSS considers calendar year, not UY, to be the deciding factor.

The TSS like many, but not all, resale companies want to treat DVC like a fixed week timeshare where if you get the week you pay the dues. While technically one could read this as you pay the entire years fees no matter how many points you get as a buyer, I believe they normally prorate them based on how many points you get compared to the total. In this case the buyer would pay half under the way I understand TSS to normally proceed and the seller has already paid the dues for the year so that's money back in their pocket. The reality is that for a Dec use year the buyer is still overpaying by about 40% in the OP example as they are going to pay the entire 2008 bill but only get half the points plus one month of the 2008 points. That's a windfall to you as a seller and a neg to a buyer in this situation. As Rob points out the buyer simply has to look at the overall package, it's easier than arguing with then on this issue.

 

[javamom]

The contract that I am currently awaiting closing on, worked this way:

UY October

0 2006 pts
158 borrowed pts from 08, must be used by October 1 2008
12 pts coming in 08

Buyer pays closing costs. Seller pays all 07 and 08 maint fees because seller "used" them all. The 08 maint fees (based upon current rate) will be deducted from the balance due at closing. First full compliment of 170 pts come 09.

Disney will bill me for 08 fees in January (because I am owner), but I will already "have" that money (less the inevitable increase) because it was knocked off the contract price at closing.

Essentially I vacation a year, sans MFs and then I pay MF for a year sans points until October - so it all comes out in the wash and it lowers my contract amount. So we were happy with it. Hope that made sense.
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